The term ‘succession’ is derived from the Latin word succession, which refers to passing down both personal property and businesses. It is used in various fields to denote evolution, change and follow-up according to a defined order; in history, it refers to passing down the monarch’s throne; in law, it is related to inheritance and legacies; and in business, it means the transfer of assets and liabilities upon the handover of management powers. Succession may also refer to a type of business understood as running and management of enterprises, management of business relations and achievement of the business and economic objectives set beforehand by those enterprises.
In legal and economic contexts, succession applies mainly to family-owned businesses, where assets and management lie in the hands of one or more families. Polish entrepreneurs who started their economic activity in the 1980s or 1990s are currently facing the challenge of planning the succession of the assets accumulated through their businesses to ensure that those businesses are continued by further generations of the family — or to withdraw from the industry altogether and monetise the assets.
This is undoubtedly a challenge, as the correct succession procedure consists of a number of legal transactions aimed at changing the ownership structure, including the need to change the legal status of the enterprise as well as implementing changes relating to business organisation and management. The stage of succession itself should be preceded by a tax analysis of the enterprise’s standing and the transactions making up the succession process. When performed correctly, succession will ensure smooth takeover if the business is inherited and reduce the risk of potential disputes in the course of the proceedings to confirm inheritance acquisition that might put business continuity at risk.
At EMPIRIUM, we specialise in preparing various succession scenarios for our clients and then implementing the scenario chosen by the client. Together with the client, we define the objectives to be achieved, get to know the ownership and organisational structure of the client’s business and conduct a legal and tax analysis of the viable transactions and legal actions in order to achieve, in the most effective way possible, the objective of succession set by the client. We also apply for individual interpretations of the relevant provisions of tax law in order to confirm that the transactions making up the succession process have been settled correctly in terms of taxes.
As part of their practice in the field of business succession, EMPIRIUM lawyers provide advice in the following areas: